Many sellers view selling a boat as a two-stage process: securing a buyer and agreeing a sale price. However, legally, there is more to the transaction; proper preparation can help avoid delays and reduce the likelihood of disputes or even the transaction falling over.
Whether you are planning to sell your boat in the next few weeks or are simply considering a future sale, there are steps you can take now to help ensure a smooth transaction when the time comes and you have found a buyer and agreed a price.
In this briefing, Oliver Ward outlines the key legal and practical considerations sellers should address at an early stage to minimise delays and reduce the risk of issues arising during the sale process.
1. Ownership documents
One of the first things a buyer will want you to prove is evidence that you own the vessel and have the right to sell it.
You should look at collecting the following documents:
all bills of sale
registration certificates
builder’s certificate and invoices
service and maintenance records
Being able to prove ownership quickly will speed up the transaction. Also, reviewing the documentation prior to marketing the boat can help identify issues that may need to be addressed prior to the sale.
2. Registration details
This is often not considered until the later stages of the transaction, but in order to avoid delays to registration, you should review the registration certificate and the transcript. You should ensure that:
the ownership details match the correct record
the boat’s name and number are correct
any changes have been properly documented
3. VAT and importation
Buyers are likely to raise questions about the VAT status of the boat. If relevant, you should look to gather any invoices, importation records and previous sale documents to evidence the status of the VAT for the boat.
If documents are missing, it is better to identify these at an early stage rather than during the latter stages of negotiation. Incorrect VAT status can be a deal breaker for the buyer.
4. Inventory
A buyer will want to know exactly what on the boat they are purchasing. Often buyers will assume that certain items are included in the sale. You should prepare a detailed inventory confirming what exactly forms part of the sale.
You might look to include:
navigation equipment
electronics
safety equipment
sails and rigging
spare parts
A clear inventory that can be inserted into the boat purchase agreement will help avoid disputes over which items were intended to be included in the sale.
5. Service and maintenance records
As with the sale of a car, you should look to evidence that the boat has been properly serviced and maintained. Buyers will often want to see:
engine maintenance documents
repairs and upgrades
surveys and reports
Presenting these documents at an early stage will ensure that the buyer has confidence in the condition of the boat or allow for negotiations to occur as to how these should be resolved.
Conclusion
Preparing a boat for sale involves a lot more than agreeing a price and finding a buyer. Sellers who take time to organise ownership documents, review registration records, locate VAT paperwork and properly document the condition of the boat are often able to navigate the sales process more efficiently and with fewer complications.
A buyer wants to purchase the boat and the boats history. You should consider this when looking to prepare for sale. Proving the history of the boat is often a longer process than demonstrating the boat is as it is at the point of sale.
Legal advice on buying or selling a boat
Speak to our corporate and commercial team
Partner Peter Jeffery and legal assistant Oliver Ward are in the corporate and commercial team based in Southampton. If you are considering buying or selling a boat, or have encountered a problem during a transaction, contact Peter or Oliver to discuss your circumstances and the legal options available to you.
Get in touch
If you would like to speak with a member of the team you can contact our corporate and commercial solicitors by telephone on +44 (0)20 3826 7539 or complete our enquiry form.
